Mahboubeh Jafari; Karim Eslamlouyan; Ebrahim Hadian; Ali Hossain Samadi
Volume 3, Issue 12 , October 2014, , Pages 20-60
Abstract
The main goal of this paper is to study the effect of social infrastructure on economic growth in a recourse-based economy. To this end, we introduce the quality of social infrastructure into an endogenous growth model. The set up allows us to see how the resource abundance can influence the quality ...
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The main goal of this paper is to study the effect of social infrastructure on economic growth in a recourse-based economy. To this end, we introduce the quality of social infrastructure into an endogenous growth model. The set up allows us to see how the resource abundance can influence the quality of social infrastructure and hence economic growth. We use optimal control theory to solve the model. The analytical solution shows that the impact of non-renewable resources on economic growth depends on the models' parameters. More specifically, we find out that if natural resource abundance leads to deterioration of social infrastructure, it might offset the positive impact of natural resources on economic growth and even might result in lower economic growth rate. We finally calibrate the model for Iran as an energy-rich economy. The calibration results indicate that in order to achieve 8 percent average growth rate, the quality of social infrastructure should improve by at least 4.3 percent. Moreover, when we ignore the quality of social infrastructure, the optimum economic growth rate is found to be 6 percent. This shows that it is important to take into consideration the role of social infrastructure in estimating long run economic growth for Iran. The result of sensitivity analysis indicates that one percent improvement in the index of social infrastructure results in 0.42 percent increase in equilibrium growth rate in Iran. This finding has important policy implications for policymakers and social planners in Iran.
Karim Aslamuliyan; Javad Harati; Ala Hossin Ostadzadeh
Volume 2, Issue 7 , July 2013, , Pages 171-197
Abstract
This paper uses the growth model of Stokey (1998) extended by Deng and Huang (2009) to examine the dynamic relationship between output and environmental pollution in Iran. After solving the model and deriving the necessary conditions for sustainable growth path, the model is used to examine the presence ...
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This paper uses the growth model of Stokey (1998) extended by Deng and Huang (2009) to examine the dynamic relationship between output and environmental pollution in Iran. After solving the model and deriving the necessary conditions for sustainable growth path, the model is used to examine the presence of Environmental Kuznets Curve (EKC) for Iran. Using MATLAB software, the model is calibrated for the Iranian economy for the period 1959-2008. This allows us to find optimal paths for key variables. The result shows that that the Iranian economy is not on its optimal sustainable growth path. Moreover, simulation results indicate that there is a positive relationship between income per capita and CO2 per capita over time. Hence, we might claim that the Iranian economy is probably on its early stage of growth. In other words, Iran might still be on the negative part of EKC. In addition, our simulation result shows that there will be a threshold level for per capita income in which the quality of environment starts improving after this point. Hence, one might conclude that the EKC might be true for Iran.
Karim Islamluian Islamluian; Ali Hossein Ostadzad
Volume 2, Issue 5 , January 2013, , Pages 1-48
Abstract
The main purpose of this study is to develop a model for determining the optimal shares of renewable and non-renewable sources of energy in a sustainable growth model. We develop an optimal control model in which nonrenewable and renewable sources of energy are inputs of production. The model allows ...
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The main purpose of this study is to develop a model for determining the optimal shares of renewable and non-renewable sources of energy in a sustainable growth model. We develop an optimal control model in which nonrenewable and renewable sources of energy are inputs of production. The model allows us to determine the optimal shares of renewable and nonrenewable energy inputs. Finally, we use the model to determine these shares for Iran. Genetic algorithms technique is used to estimate the coefficient for production and utility functions. We also estimate the pollution equation. Using these parameters, we derive the optimal paths for consumption, output and renewable and nonrenewable energy shares in Iran. The results show that the optimal share of renewable energy in total energy consumption is about 0.8 percent in 2010. While the actual share of renewable energy in Iran was 0.4 percent. Moreover, our model predicts this share should rise to 2.1 percent of total energy consumption by 2021 to be able to stay on sustainable growth path. This requires an average growth rate of 26 percent in renewable energy production each year.
